PROJECT A.L.S., INC. FINANCIAL STATEMENTS YEARS ENDED JULY 31,2015 AND 2014

Transcription

1 FINANCIAL STATEMENTS YEARS ENDED JULY 31,2015 AND 2014

2 FOR THE YEARS ENDED JULY 31, 2015 AND 2014 Table of Contents Independent Auditor's Report 1-2 Financial Statements Statements of Financial Position Statements of Activities Statements of Functional Expenses Statements of Cash Flows Notes to Financial Statements

3 Cl..,.. INCOOPERMAN Attest & Assurance I Tax Compliance & Research I Specialty & Consulting INDEPENDENT AUDITOR'S REPORT To the Board of Directors Project A.L.S., Inc. We have audited the accompanying fmancial statements of Project A.L.S., Inc. (the "Organization") (a not-for-profit organization) which comprise the statements of fmancial position as of July 31, 2015 and 2014, and the related statements of activities, functional expenses and cash flows for the years then ended, and the related notes to the fmancial statements. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an op1ruon on these fmancial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the fmancial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the fmancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Organization's preparation and fair presentation of the fmancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Organization's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the fmancial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinio n. CITRIN COOPERMAN & COMPANY, LLP 529 FIFTH AVENUE, NEW YORK, NY TEL I FAX C ITRINCOOPERMAN.COM AN INDEPENDENT rirm ASSOCIATEO WITH MOORE STEPHENS

4 Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the fmancial position of Project r\.l.s., as of July 31, 2015 and 2014, and the changes in its net assets and its cash flows for the years then ended, in accordance with accounting principles generally accepted in the United States of America. New York, New York November 13, 2015 CAYMAN I CONNECTICUT J NEW JERSEY J NEW YORK J PENNSYLVANIA 2

5 STATEMENTS OF FINANCIAL POSITION JULY 31, 2015 AND ASSETS Cash and cash equivalents $ 2,759,003 Investments 194,407 Contributions and grants receivable 128,419 Prepaid expenses and other assets 147,779 Property and equipment, less accumulated depreciation of$4,779 in 2015 and $428,423 in TOTAL ASSETS $ $ 2,084,610 75, , $ LIABILITIES AND NET ASSETS Liabilities: Accounts payable and accrued expenses $ 243,048 Grants payable 2,482,978 Deferred special event revenue Total liabilities Commiunents (Notes 2 and 6) Net assets: Unrestricted 234,893 Temporarily restricted Total net assets TOTAL LIABILITIES AND NET ASSETS $ $ 257,476 1,680, , $ See accompanying notes to financial statements. 3

6 STATEMENTS OF ACTIVITIES FOR THE YEARS ENDED JULY 31,2015 AND Temporarily Temporarily Unrestricted Restricted Total Unrestricted Restricted Total Revenues: Special event revenue, net of direct benefits to donors of $545,329 in 2015 and $355,358 in 2014 s 1,454,476 $ $ 1,454,476 $ 1,244,252 $ $ 1,244,252 Grants and contributions 1,148,915 25,000 1,173, , ,628 Other fundraising 361, , , ,457 Realized gains 2,640 2, Unrealized losses (6,901) (6,901) Net assets released from resu-ictions ) (82 226) Total revenues ) Expenses: Program: Grants and research 2,281,386 2,281,386 1,385,019 1,385,019 Education Total program Supporting services: Management and general 182, , , ,612 Fundraising Total supporting services Total expenses Change in net assets (29,840) (29,840) (6,253) (82,226) (88,479) Net assets -beginning NET ASSETS - ENDING s $ $ $ $ $ Sec accompanying notes to financial statements. 4

7 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JULY 31,2015 Grants and Program Management Research Education Total and General Fundraising Total Officers' salaries $ 228,962 s 56,144 s 285,106 s 16,547 $ 18,997 $ 320,650 Other salaries 67,079 8,294 75,373 83,174 9, ,723 Payroll taxes and employee benefits 48,867 10,637 59,504 16,461 4,651 80,616 Grants to others 1,812,777 1,812,777 1,812,777 Professional fees and outside services 14,250 58,761 73,011 41,565 89, ,190 Special event costs, net of direct benefits to donors 83,498 83,498 97, ,481 Telephone 10,031 2,183 12,214 3, ,548 Office supplies and expenses 22,789 4,960 27,749 7,676 2,169 37,594 Occupancy costs 28,550 6,214 34,764 9,617 2,717 47,098 Postage and shipping 1,283 2,309 3, ,132 Printing, publications and website 45,383 45,383 2,389 47,772 Conferences, meeting and travel 42,214 16,393 58, ,664 Depreciation Newsletter 8,680 8, ,137 Other expenses TOTAL EXPENSES $ $ s s $ $ See accompanying notes to financial statements. 5

8 STATEMENT OF FUNCTIONAL EXPENSES FOR THE YEAR ENDED JULY 31,2014 Grants and Pro ram Management Research Education Total and General Fundraising Total Officers' salaries $ 205,277 $ 39,325 $ 244,602 s 25,954 s 44,044 $ 314,600 Other salaries 50,522 6,283 56,805 65,671 8, ,115 Payroll taxes and employee benefits 36,987 6,594 43,581 13,248 7,618 64,447 Grants to others 986, , ,667 Professional fees and outside services 13,644 41,250 54,894 41,722 68, ,366 Special event costs, net of direct benefits to donors 104, ,761 83, ,058 Telephone 9,121 1,626 10,747 3,267 1,879 15,893 Office supplies and expenses 16,885 3,011 19,896 6,049 3,478 29,423 Occupancy costs 25,987 4,633 30,620 9,309 5,352 45,281 Postage and shipping 889 1,777 2, ,333 4,443 Printing, publications and website 38,444 38,444 6,784 45,228 Conferences, meeting and travel 34,708 12,230 46, ,223 48,919 Depreciation Newsletter 7,024 7,024 1,239 8,263 Other expenses TOTAL EXPENSES $ $ $ $ $ $ See accompanying notes to financial statements. 6

9 STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED JULY 31,2015 AND Cash flows from operating activities: Change in net assets $ (29,840) $ (88,479) Adjustments to reconcile change in net assets to net cash provided by (used in) operating activities: Donated securities (200,075) Depreciation Loss on disposition of assets 104,669 Realized and unrealized gains 4,261 Changes in assets and liabilities: Contributions and grants receivable (53,172) (61,111) Prepaid expenses and other assets (37,560) (56,838) Deferred special event revenue 201,308 Accounts payable and acctued expenses (14,428) (7,102) Grants payable (190,083) Net cash provided by (used in) operating activities 672,986 (298,505) Cash provided by investing activities: Proceeds from sales of securities Net increase (decrease) in cash and cash equivalents 674,393 (298,505) Cash and cash equivalents - beginning CASH AND CASH EQUIVALENTS- ENDING $ $ See accompanying notes to financial statements. 7

10 NOTES TO FINANCIAL STATEMENTS JULY 31,2015 AND 2014 NOTE1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of Activities Project A.L.S., Inc. (the "Organization") is a nonprofit corporation incorporated in the state of New York in August 1998 to fund research efforts in order to find effective treatments and a cure for Amyotrophic Lateral Sclerosis ("ALS") and to raise public awareness about the disease through educational efforts. Basis of Financial Statements The accompanying financial statements have been prepared on an accrual basis of accounting and are presented in accordance with accounting requirements for not-forprofit organizations. These requirements provide that all not-for-profit organizations provide a statement of financial position, a statement of activities, and a statement of cash flows, and that net assets are classified as unrestricted, temporarily restricted, or permanently restricted based on the existence or absence of donor stipulations regarding the use of such assets. The Organization has no permanently restricted net assets. The net assets of the Organization and changes therein are classified and reported as follows: Unrestricted net assets represent net assets that are not subject to donorimposed stipulations. Temporarily restricted net assets are net assets whose use has been limited by donors to a specific time period and/ or purpose. Permanently restricted net assets are subject to donor-imposed stipulations that the principal corpus be maintained in perpetuity. Functional Expenses The costs of providing the Organization's various programs and supporting services have been summarized on a functional basis in the statements of activities. Accordingly, certain costs have been allocated among program and supporting services in reasonable amounts and ratios determined by management. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at tl1e date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. Cash and Cash Equivalents The Organization considers all highly liquid instruments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents are comprised of a money market fund held in a brokerage firm. 8

11 NOTES TO FINANCIAL STATEMENTS JULY 31, 2015 AND 2014 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Investments Investments are reported at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. See Note 7 for discussion of fair value measurements. Purchases and sales of securities are recorded on a trade-date basis. Unrealized gains and losses represent the net change in the carrying value of securities owned as of the date of the statement of fmancial position. Realized gains and losses on investments are determined using the specific-identification method. Earnings from dividends are recognized when earned. Revenue Recognition Contributions are recognized when a donor makes a promise to give to the Organization that is, in substance, unconditional. Conditional promises to give are recognized as contributions when substantially all conditions are met. Contributions received are measured at their fair value and are reported as an increase in net assets. The Organization reports gifts of cash and other assets as temporarily restricted support if they are received with donor stipulations that limit their use or if they are designated as support for future periods. When a donor restriction is accomplished, temporarily restricted net assets are reclassified to unrestricted net assets and reported in the statements of activities as "Net assets released from restrictions." In addition, a number of unpaid volunteers have made or have agreed to make significant contributions of their time. The value of such contributions is not reflected in these financial statements since these services do not require specialized skills. Contributions and Grants Receivable Contributions and grants receivable are stated at the amount management expects to collect from outstanding balances. Contributions and grants receivable are due in less than one year; therefore no discount to present value is required. Management evaluates such receivables and establishes an allowance for doubtful accounts based on a history of write-offs and collections and current credit conditions. The Organization has determined that all receivables are fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to expense when that determination is made. Property and Equipment The Organization capitalizes those items with a useful life over one year. If purchased, property and equipment are recorded at cost; donated property and equipment are recorded at their estimated fair value at the date of donation. Property and equipment are depreciated using the straight-line method over their estimated useful lives. 9

12 NOTES TO FINANCIAL STATEMENTS JULY 31,2015 AND 2014 NOTE1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred Special Event Revenue Contributions related to and received in advance of a fundraising event are recorded as deferred revenue until tbe actual occurrence of tbe event or tbe appropriate fiscal year, at which time tbe contributions are then recognized as revenue. Tax Status The Organization is exempt from federal income taxes under Section 501 (c)(3) of tbe Internal Revenue Code and is also exempt from state and local taxes. The Organization recognizes and measures its unrecognized tax benefits in accordance with Financial Accounting Standards Board ("F.ASB") Accounting Standards Codification ("ASC") 740, Income Taxes. Under d1at guidance, the Organization assesses the likelihood, based on their technical merit, that tax positions will be sustained upon examination based on tbe facts, circumstances and information available at tbe end of each period. The measurement of unrecognized tax benefits is adjusted when new information is available, or when an event occurs that requires a change. Management has evaluated d1e Organization's tax positions and has concluded that the Organization has taken no uncertain tax positions that require adjustment to tbe financial statements. Generally, the Organization is no longer subject to U.S. federal or state income tax examinations by taxing authorities for years before Fair Value Measurements F ASB ASC 820, Fair Vallie Measmm;ent, establishes a framework for measunng fair value. That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). Under this standard, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of tbe measurement date. The three levels of the fair value hierarchy under FASB ASC 820 are described as follows: Level 1 inputs to tbe valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Organization has the ability to access. Level 2 inputs to the valuation methodology include: quoted prices for similar assets or liabilities in active markets; quoted prices for identical assets or liabilities in inactive markets; inputs otber than quoted prices that are observable for tbe asset or liability; and, inputs tbat are derived principally from or corroborated by observable market data by correlation or od1er means. If the asset or liability has a specified (contractual) term, tbe Level 2 input must be observable for substantially tbe full term of the asset or liability. Level 3 inputs to the valuation methodology are unobservable and significant to tbe fair value measurement. 10

13 NOTES TO FINANCIAL STATEMENTS JULY 31,2015 AND 2014 NOTE!. NOTE2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Subsequent Events In accordance with FASB t\sc 855, Sllb.reqmnt E!Jei/IJ, the Organization has evaluated subsequent events through November 13, 2015, the date on which these financial statements were available to be issued. There were no material subsequent events that required recognition or additional disclosure in these financial statements. GRANTS TO OTHERS As part of its mission, the Organization has committed to provide grants and assistance to various health organizations, specific individuals, and medical research facilities involved in finding a cure for t\ls. During 2015 and 2014, the Organization provided funds under such commitments to Children's Hospital, Columbia University, Harvard Medical School, New York University, Psyo Genies, Inc., Sloan Kettering, and University of Massachusetts. Atjuly 31, 2015, the following summarizes the Organization's grant payments due over the remaining commitment periods: Year ending July 31: Atnount $ 837, , $ NOTE3. PROPERTY AND EQUIPMENT A summary of property and equipment atjuly 31, 2015 and 2014, is as follows: 1Alhorator) cquiptnent Equipment $ $ 424, Less: accumulated depreciation 5,228 (4.779) 429,311 (428,423) Property and equipment, net $==~ 449 $ 888 Depreciation expense was $439 for each of the years ended July 31, 2015 and 2014, respectively. 11

14 NOTES TO FINANCIAL STATEMENTS JULY 31,2015 AND 2014 NOTE4. NOTES. CONCENTRATIONS OF CREDIT RISK Financial instruments that potentially subject the Organization to concentrations of credit risk consist of cash on deposit with a commercial bank and investments with a brokerage ftrm. At times, the Organization's cash and cash equivalents and investments, which are placed in major financial institutions, exceed the insurance coverage provided by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. The Organization has not experienced any losses in such accounts. TEMPORARILY RESTRICTED NET ASSETS Temporarily restricted net assets at July 31, 2015 and 2014, are available to satisfy the following purposes: Research fellowships $ $ During the years ended July 31, 2015 and 2014, net assets were released from donor restrictions by incurring expenses satisfying the following temporarily restricted purposes or by the passage of time: Research fellowships $ 25,000 $ JE Stem Cell Laboratory NOTE6. COMMITMENTS $ $ In February 2015, the Organization renewed its operating lease for rental of office space commencing on!\larch 1, 2015, and expiring on February 28, The remaining commitment in connection with this operating lease for the year ending July 31, 2015, amounts to $22,281. Rent expense for the years ended July 31, 2015 and 2014, amounted to $47,098 and $45,281, respectively. 12

15 NOTES TO FINANCIAL STATEMENTS JULY 31, 2015 AND 2014 NOTE7. FAIR VALUE MEASUREMENTS Assets and liabilities measured at fair value are based on one or more of three valuation techniques identified in the tables below. The valuation techniques are as follows: (a) (b) (c) Market app!vacb. Prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities; Cost app!vacb. Amount that would be required to replace the service capacity of an asset (replacement cost); and Inmme app!vacb. Techniques to convert future amounts to a single present amount based on market expectations (including present value techniques, option-pricing and excess earnings models). The following tables present the Organization's assets on a recurring basis using the fair value hierarchy as of July 31, 2015 and 2014: Levell: Quoted Prices in Level2: Active Significant Markets for Other Total at Identical Observable D_e_s_cr_ ip._11_.o.;...n..~.j_u_.ly_3:...1"',-'2-'0-'1"-5 ---'A=ss:..:ec:.ts:... I=n::rp:..:u:..:ts:... Common stock: Financial servtces Cash equivalents: Money market fund Total $ $ 194,407 $ 194,407 $ $ $ $ =...,;;== Level3: Significant Unobservable Valuation Inputs Technique (a) (a) 13

16 NOTES TO FINANCIAL STATEMENTS JULY 31,2015 AND 2014 NOTE?. FAIR VALUE MEASUREMENTS (CONTINUED) Description Cash equivalents: Money market fund Total Total at July 31,2014 $ $ $ $ Levell: Quoted Prices in Active Markets for Identical Assets $ $ Level2: Significant Other Observable Inputs Level3: Significant Unobservable Valuation Inputs Technique $ (a) $ The following is a description of the valuation methodology used for the asset measured at fair value. Money market fund is valued at net asset value, which represents fair value based on end-of-year values. Common stock is valued based on quoted market prices, when available, or market prices provided by recognized broker-dealers or fund managers. There have been no changes in the methodologies used at July 31,2015 and NOTES. The preceding method described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Organization believes its valuation method is appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instmments could result in a different fair value measurement at the reporting date. RETIREMENT PLAN The Organization sponsors a defined contribution 403(b) retirement plan covering substantially all of its full-time employees. No contributions were made to the plan on behalf of the employees for the years ended July 31, 2015 and 2014, respectively. 14